I have always been interested in what tax does to a deal. After working for two years as a tax accountant at Price Waterhouse, however, I realized that tax lawyers did one hundred percent of the time, the work that I most enjoyed but only did twenty percent of the time. From there, it was an easy decision to attend Columbia Law School and practice tax law at Milbank Tweed in New York. Although I enjoyed the tax work, I was still fascinated, however, with the deal itself.

The Minnesota Senate today voted to raise the state's top tax bracket to 9.7% (from the current 7.85%) on incomes in excess of $250,000 ($141,250 for single taxpayers), which would be the highest income rate in the country (topping Vermont's 9.5% and California's 9.3% (which has also has a 1% surtax on incomes over $1 million),

[This] paper examine[s] participation rates and contributions to employment-based retirement plans, individual retirement accounts (IRAs), and self-employed plans. ...Overall, participation in tax-favored retirement plans remained stable between 2000 and 2003. The slight increase in 401(k) participation was offset by a small dip in IRA participation. The EGTRRA provision that affected the largest number of IRA participants was the increase in the general contribution limit from $2,000 to $3,000, which allowed an additional 12 percent of participants—1% of all workers—to contribute as much as they wanted. The provision that affected the largest number of 401(k) participants was the introduction of $2,000 “catch-up” contributions for those age 50 and over.

These tables have been updated to include all returns that were required to be filed and use new size of gross estate categories that mirror the estate filing thresholds created by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Because most estate tax returns are filed in the year following a decedent’s death, the original versions of these tables excluded returns below the prior year’s filing threshold. Two revised tables are available for each filing year. The first table includes data on gross estate, type of property, deductions, and tax items, by tax status and size of gross estate. The second table includes data on gross estate, allowable deductions, State death tax credit, and tax, by State of residence.

Federal courts have long struggled with the question of whether, and to what extent, they will grant the request of a litigant who is seeking the discovery of an opponent's income tax returns. A generation ago, William Edmunson traced the development of a “qualified privilege,” which provides some protection to taxpayers. Edmunson argued against this privilege, as the relation between taxpayer and IRS does not satisfy Wigmore's principle that Evidentiary Law should only recognize a privilege where the communications are intended to be confidential, as it is well-understood that the IRS may share tax information with other government agencies. Nevertheless, courts have continued to recognize and develop such a privilege, though a consensus for a precise test continues to elude the courts.

In a prior post, I criticized the government’s opposition brief for conceding that the word “income” in section 61 of the Internal Revenue Code – the provision that operates to impose a tax on “all income from whatever source derived” – has the same meaning as the term “income” in the 16th Amendment. There is no doubt, of course, that the language of the two provisions is similar, and that section 61 was derived from the 16th Amendment. But many people (possibly including a majority of the current Supreme Court, as well as the Chief Judge of the panel hearing the appeal) believe that constitutional terms like “income,” which do not inherently reflect evolving societal standards, had a meaning fixed at enactment. Indeed, the Murphy appellate panel previously held – on the basis of questionable historical evidence – that the enactors of the 16th Amendment did not think that compensatory personal injury awards were “income.” If that historical meaning applies to the word “income” used in the taxing statute, then Congress simply did not tax Ms. Murphy’s award. There would be no need to debate the niceties of Congress’s taxing power if Congress simply failed to exercise its power in a statutory enactment. By conceding that the word “income” has the same meaning in both the 16th Amendment and IRC section 61, the government has opened the door for the Court to hold that Congress failed to exercise its full constitutional power.

Facilitating Legal Compliance and Public Disclosure—responsibilities and practices, such as implementing conflict of interest and whistleblower policies, that will assist charitable organizations in complying with their legal obligations and providing information to the public.

Effective Governance—policies and procedures a board of directors should implement to fulfill its oversight and governance responsibilities effectively.

Strong Financial Oversight—policies and procedures an organization should follow to ensure wise stewardship of charitable resources.

Responsible Fundraising—policies and procedures organizations that solicit funds from the public should follow to build donor support and confidence.

The tax rules governing deferred compensation, codified at section 409A, are harsh and complex. The rules are focused on the least important policy considerations and overlook the most important. Professors Halperin and Yale suggest a different approach, one that would make the law simpler, fairer, and more effective.

Executive pay is currently a topic of significant interest for policymakers, academics, and the popular press. Just weeks ago, in reaction to widespread press reports and academic criticism of extravagant executive perquisites, the SEC proposed new regulations designed to change fundamentally the manner in which executive compensation is reported to share-holders. Despite all of this attention, one significant aspect of executive deferred compensation has gone virtually unnoticed - the federal tax rules governing this form of compensation are fundamentally flawed and must be extensively over-hauled. These rules are flawed because they often create a significant incentive for companies and their executives to structure deferred, rather than current, compensation, thereby producing highly inefficient and inequitable results. This Article addresses potential legislative reforms that would remedy this problem by neutralizing the tax treatment of current and deferred compensation. While this neutrality goal, which was part of the recent proposals made by President Bush's Advisory Panel on Tax Reform, is easy to describe in general and conclusory terms, the devil is in the details. There has been little serious academic analysis of how to implement a set of tax rules that would create neutrality while avoiding undue complexity. This Article attempts to fill that void.

The new 2008 U.S. News Law School Tax Rankings are out and available on-line here. U.S. News ranked the Top 25 this year (with ties); here are the Top 10:

1. NYU (#1 last year)

2. Florida (#2)

3. Georgetown (#3)

4. Northwestern (#4)

5. Harvard (#5)

6. Miami (#5)

7. UCLA (#7)

8. Boston University (#7)

9. Texas (#15)

10. San Diego (#9)

10. Virginia (#11)

10. Yale (#11)

The biggest upward moves are:

+6 Texas (#9)

+3 Loyola-L.A. (#16)

The biggest downward moves are:

-6 USC (#21)

-5 U. Washington (#18)

-4 Stanford (#13)

-2 Denver (#21)

Last year, U.S. News ranked the Top 21 schools. Five schools that were unranked last year made this year's Top 25: Duke (#14), Penn (#18), Boston College (#21), Columbia (#21), and Florida State (#21).

One school that was in last year's Top 21 dropped out of the rankings this year: Chicago (#17 last year)

The 12 schools with graduate tax programs included in the rankings are the same as last year:

1. NYU (#1 last year)

2. Florida (#2)

3. Georgetown (#3)

4. Northwestern (#4)

5. Miami (#5)

6. Boston University (#6)

7. San Diego (#7)

8. Loyola-L.A. (#10)

9. SMU (#9)

10. U. Washington (#8)

11. Villanova (#10)

12. Denver (#10)

Loyola-L.A. is the only graduate tax program to move up (+2) in the rankings; Denver (-2), University of Washington (-2), and Villanova (-1) all moved down.

This conference brings together academics and nonprofit leaders for an interdisciplinary discussion about the future of charities governance and law. Speakers will discuss the direction that nonprofit law and governance have been taking, considering whether there are gaps within the law itself and between law and practice, and whether the evolving legal regulation of nonprofit organizations is a force for innovation and growth or an impediment to creativity and efficiency. The nonprofit sector is concurrently criticized and applauded for emulating the for-profit world, and prominent issues for business corporations, such as accountability, executive compensation, and board independence have taken center stage in the discussion about nonprofit organizations. Conference participants will consider whether the questions and answers are the same for nonprofits as for business corporations on these issues, and how useful the business model is for both governance and regulation of nonprofit organizations.

The economy has recovered and most states are flush again with revenues. This is an ideal time to step back and examine how state (and local) governments responded to the fiscal crises that developed at the turn of the millennium and what pressures loom ahead for states. What contributed to the budget shortfalls and how can those pitfalls be avoided in the future? How did states balance their budgets? Did property tax revenues support state and local tax systems after stock market prices fell resulting in swings downward in income and sales taxes? Is the current tax system adequate to provide needed services? We will address these questions at this all-day conference.

For the list of panels, speakers, and their topics (with links to papers), see below the fold.

The ABA Center for Continuing Legal Education and its partners are pleased to announce the first installment in a series of programs for newly admitted Illinois attorneys. This first course “Tax Law 101” will provide the new attorney with the basics of tax law and tax practice. To meet the Illinois Basic Skills Course requirements, you must also sign up for a New Lawyer 101 session, which will be offered twice in the upcoming year. Tax Law 101 will cover:

Jenkens & Gilchirst, the 56-year old Dallas-based law firm which in its heyday had 600+ attorneys, is shutting is doors and paying a $76 million fine after entering into a nonprosecution agreement with the U.S. government for its role in marketing tax shelters that generated more than $1 billion in phony tax losses.

On Tuesday, I blogged the Washington Post's obituary of Mary Livingston, a senior archivist in the Office of Presidential Libraries at the National Archives for 30 years who blew the whistle on President Nixon's attempted backdating of the donation of his papers in order to claim a charitable deduction for the donation. Shledon S. Cohen, IRS Comissioner under President Johnson (1964-69) and currently Director, Farr, Miller & Washington, Washington, D.C., has agreed to share his experience during this period:

Sen. John Williams of Delaware introduced a bill to cut off deductions for the gift of papers developed while the person was in government service. The bill had a effective date of April 1969 and applied to gifts after that date. It was aimed at then former President Johnson as a news story appeared that said he was planning a gift. President Johnson had used me as his tax lawyer after we left office ....I told him not to be concerned with the bill as the bill only covered income tax deduction and I planned to give his papers at his death and take an estate tax deduction (the marital deduction was then only 50%) and give the rest of the property to Mrs. Johnson free of tax.

One of the most fundamental issues in tax law involves the timing of when an accrual basis taxpayer recognizes income under section 451. At the heart of this inquiry is a basic question: “What does it mean to have a fixed right to income?” The issue, which appears simple on its face, can be quite difficult in application, given that the answer depends on a myriad of factors, including the taxpayer’s business operations, contractual terms, and commercial practices. Over time, in addressing a wide range of fact patterns, the courts have articulated a variety of principles and established a number of precedents that provide a road map for analysis that most taxpayers find generally workable, albeit not always to their liking.

It appears that all that happened was that the plea agreement did not nail down restitution. Federal tax restitution is not generally allowed in tax cases unless it is provided in the plea agreement. Commonly, the resolution of the tax matter is not addressed by restitution in the plea agreement and is left to the ordinary civil processes that grind away after sentencing. The statute of limitations should stay open forever (e.g., by collateral estopple if an evasion conviction and by proof in other convictions). So, the IRS still has the ability to collect the taxes (assuming he has not frittered them away, but even if he has frittered them away a good restitution provision in the plea agreement would not help). It is not quite the disaster as a plain text reading of either your blog or the WaPo article. (Note, however, that the WaPo article does say: "IRS spokeswoman Peggy Thomas said the agency will "do everything in our power to get this money" from Anderson in civil proceedings;" that quote may not be intelligible to the average WaPo reader, but tax lawyers know that the mechanisms to collection the tax civilly are formidable indeed.)

To implement the Private Debt Collection program (Program), the IRS will use private collection agencies (PCAs or contractors) as an additional resource to help collect delinquent Federal taxes. In July 2004, the Department of the Treasury estimated the IRS will collect $1.4 billion through the Program in Fiscal Years 2006-2015. Balance-due cases were first placed with three PCAs on September 7, 2006. Overall, the IRS effectively developed and implemented several aspects of the Program, thus providing better assurance that taxpayer rights are protected and Federal tax information is secure. However, the IRS needs to follow up on computer security issues, update procedure guides, and update the application used to calculate projected revenue.

The realm of GST tax compliance has undergone significant transformation in recent years, including: statutory changes under the Economic Growth and Tax Relief Reconciliation Act of 2001; final regulations governing elections into and out of treatment of a trust as a GST trust; proposed regulations governing qualified severances; and changes to federal Form 709.

This teleconference and live audio webcast will focus on the translation of theoretical GST tax rules into practice through a step-by-step examination of Form 709 and separate notice of allocation. Our experts will explore common errors and omissions and recommend best practices to help your client take advantage of the recent changes in GST tax law in allocating GST exemption or electing into/out of automatic allocations. This program also will review the procedure for obtaining Section 9100 relief for an extension of time to allocate GST exemption and how to report qualified severances of trusts. Our experts will review sample forms in detail during this program and strongly recommend that participants download the written materials before commencement of this program.

A Dutch court has added a new item to the list of activities eligible for tax relief — drug running. Judges in the central city of Arnhem recently declared that a professional fisherman convicted of smuggling drugs could deduct the cost of buying and shipping hashish to the Netherlands from his income on his tax return, national daily De Telegraaf reported Tuesday. ...

The Telegraaf reported that the smuggler, whose identity was not released, appealed to the Arnhem court after being slapped with a euro3.3 million ($4.4 million) tax bill. The court ruled that because he had only been convicted of drug running and not trading in drugs he could deduct the cost of buying and transporting the drugs on his tax form. That cut his tax bill to euro1.8 ($2.4 million) — a saving of euro1.5 million ($2 million). Under Dutch law, marijuana and hashish are illegal but police don't fine smokers for possession of less than five grams (one-sixth of an ounce) or prosecute for possession of less than 30 grams (one ounce). Authorities look the other way regarding the open sale of cannabis in designated "coffee shops." But growers are subject to raids and prosecution, meaning the officially tolerated shop owners have no legal way to purchase their best-selling product.

The case isn't the first time a court's ruling on taxes has raised Dutch eyebrows. In 2005, judges in the northern city of Leeuwarden ruled that witches can write off the cost of schooling in witchcraft against their tax bills if it increases the likelihood of employment and personal income [blogged here].

Here is one issue I have not thought about in preparing to teach my class: how to wear my hair:

In my first three years, I never ever ever wore my hair down when I taught. Instead, I generally wore it pulled back in a low, neat ponytail. I associated wearing my hair pulled back with being older, more authoritative, and less sexy, and wearing my hair down with being younger, more carefree, and more "girly." As a young female prawf, I wanted my students, male and female alike, to view me as a professor and not a "girl their age." I never thought twice about my conclusion until Christine Hurt asked me incredulously if I "thought I looked more grown-up in a ponytail?"

Many cultures have norms concerning how women should wear their hair depending on age and marital status, so I don't think I'm completely crazy to ponder the hair up/hair down decision. On the other hand, I decided to test Christine's theory and start wearing my hair down occasionally to class. So far, my students still seem to respect me.

All over New York, clever lawyers have helped wealthy energy companies and shopping malls, century-old factories and even low-wage taverns win state tax breaks intended for someone else. The lawyers also helped themselves. Syracuse, Albany and Buffalo law firms some of Upstate New York's oldest, healthiest and most politically entrenched institutions erased their state tax bills with Empire Zone benefits, according to recently released records that provide the first public accounting of the program.

At least 70 law firms cost state taxpayers more than $6 million in 2005, records show. Gov. George Pataki and state legislators voted in 1999 to revive an underused set of tax breaks to bring new businesses into poor neighborhoods. They intended Empire Zones as a weapon to help New York compete with other states in the battle to attract new businesses. Instead, Bond, Schoeneck & King claimed $1.2 million in state tax credits in 2005 more than any other law firm. It is a 110-year-old firm that shuffled paperwork to make itself look new, qualifying it for a more lucrative set of tax breaks.

The U.S. District Court for the Northern District of Illinois on Tuesday granted the Government's motion for summary judgment in yet another tax shelter case: Cemco Investors LLC v. United States, No. 04 C 8211 (N.D. Ill. 3/27/07). The particular shelter was a BLIPSS variant -- the goal was to increase the basis of a partnership through the purchase of offsetting foreign currency contracts. The judge did not buy it:

As detailed below, Cemco’s theory consists of several nuanced procedural steps. Ultimately, however, the argument amounts to little more than a house of cards, for if any of the steps fail (and several do), Cemco’s entire position collapses.

In celebration of JURIST’s 10th anniversary, the University of Pittsburgh School of Law joins JURIST in presenting a provocative conference exploring issues at the intersections of law, war, rights and social justice that have figured prominently in JURIST’s coverage in recent years, while also taking an insightful look at how the media have been reporting legal news and how the Internet and technology are changing the conversation. Join us for a day of lively, informative exchange among leading lawyers, legal scholars, journalists, and technologists from across the United States. The conference features four all-star panels, with experts such as Jonathan Freiman, counsel to Jose Padilla; David M. Crane, former chief prosecutor for the UN war crimes court in West Africa; Edward A. Adams, editor of the ABA Journal; FindLaw founder Tim Stanley; and the featured keynote speaker, Emmy Award-winning former CNN Supreme Court and legal affairs correspondent Charles Bierbauer.

Tax codes are notoriously dull reading. They are devoid of interest to anyone but professionals trained in the arcane language of the tax laws who, even then, never actually consult them except when required by a specific task at hand. The idea of a lengthy, commercially published tax code, profusely illustrated with humorous cartoon-like drawings full of puns and whimsy, with illustrations beautifully hand printed in color, seems almost unimaginable. But such an incredible book exists! Add to this the facts that the book was printed in occupied Paris near the end of World War II and that it contains numerous risqué and decidedly antiauthoritarian images, and one begins to appreciate how truly fantastic this book is.

The recent stagnation of women's labor force participation, in combination with new research suggesting a decline in women's labor elasticities, demands a fresh look at proposals for tax reform. In this paper, I first examine the new data on women's labor participation and elasticity and briefly explain aspects of the tax code that are viewed as distorting women's labor force decisions. I then look at the three arguments generally advanced in favor of tax reform to eliminate gender bias--equal treatment, efficiency, and fairness. I consider which reform proposals advance each goal, and question whether the new data strengthens or weakens the various proposals. I also examine the political viability of each reform in light of the history of changes to the tax code and debates surrounding the marriage penalty in the last twenty-five years. Ultimately, I argue that a combination secondary earner/childcare credit, while not ideal, is the most effective way to address the tax disincentives for married women, while still partially satisfying the competing goals of equal treatment, efficiency, fairness and political feasibility.

The paper received Honorable Mention in the 2006 Tannenwald Tax Competition.

Furthering investment in Indian country (a term that includes, but is not limited to, reservations) is an important goal, but potential investors are hesitant-and with reason. One disincentive to invest is uncertainty about tax liability. Understanding taxation in Indian country requires knowledge not only of traditional tax law, but also of American Indian law principles dating from the early nineteenth century, and not many practitioners are up to that task. This article tries to make sense, as much as is possible, of the doctrines that have developed over the centuries.

With the taxpayer's filing of its reply, the briefing is now complete in preparation for the April 23 oral argument in the D.C. Circuit panel's rehearing in Murphy v. IRS, 460 F.3d 79 (D.C. Cir. 8/22/06). In its now-vacated opinion, the panel held that § 104(a)(2) is unconstitutional under the 16th Amendment as applied to a recovery for a non-physical personal injury unrelated to lost wages or earnings.

Eccentric Washington telecommunications mogul Walter C. Anderson was sentenced yesterday to nine years in prison for failing to pay $200 million in taxes -- but a federal judge ruled the IRS won't be repaid for now because prosecutors botched the plea agreement. Anderson, the biggest convicted tax cheat in U.S. history, received the longest punishment ever given in a tax crime case for his admitted effort to hide $365 million in personal income in the 1990s. He avoided paying taxes by using aliases, shell companies, offshore tax havens and secret drop boxes abroad. ...

In a major embarrassment to the government's seven-year prosecution of Anderson, the judge ruled he could not order Anderson to make restitution to the IRS for an estimated $140 million of his unpaid federal income taxes. Friedman blamed prosecutors for making a sloppy plea agreement with Anderson.

Poor families in many states face substantial state income tax liability for the 2006 tax year. In 19 of the 42 states that levy income taxes, two-parent families of four with incomes below the federal poverty line are liable for income tax. In 15 of the 42 states, poor single-parent families of three pay income tax. And 29 of these states collect taxes from families of four with incomes just above the poverty line.

[A] seminar on the most relevant U.S. tax issues in cross-border tax planning from a corporate perspective. Learn about the hottest U.S. tax issues including a Washington tax update and the Treasury Department's ongoing efforts to issue regulatory guidance on a variety of international issues. Our experienced faculty ... will guide you through the recent IRS regulations, reporting requirements and show you practical strategies for reducing foreign and U.S. taxes.

In recent years, two of the most critical issues in international taxation have involved the transfer pricing treatment of related party services and intangibles transactions. This program will focus on the recently promulgated Final and Temporary Regulations on related party services and intangible property transactions, including practical advice regarding the implementation of such regulations. Please join our distinguished panel as they discuss, among other issues, the new services cost method and the intangibles elements of the new regulations. The discussion will also include an economic analysis of the new regulations.

In 1954 the National Conference of Commissioners on Uniform State Laws, at the request of the Section of Taxation of the American Bar Association, created a special committee to draft a uniform income tax apportionment act. The result was the Uniform Division of Income for Tax Purposes Act (UDITPA). With respect to interstate taxpayers (other than financial organizations, public utilities, and individuals rendering personal services), it provides for formula apportionment of “business income” and allocation to situs of “nonbusiness income.” It defines “business income” as “income arising from transactions and activity in the regular course of the taxpayer’s trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade or business operations.” All other income is classified as “nonbusiness income.”

Michigan has established a low-income tax clinic and has secured a $35,000 matching grant from the IRS to fund its first year of operations. For more details, see the press release. (Hat Tip: David Hasen.)

Employment taxes account for an enormous share of federal tax receipts. And it is widely acknowledged that taxes on the self-employed are collected under a dysfunctional set of laws that is long overdue for repair. Yet, there is surprisingly little legal scholarship in the field. This article fills a portion of that gap. It examines some fundamental flaws that plague our nation’s employment tax laws, focusing on how President Bush’s dividend tax cut created an incentive for wealthy individuals to exploit those flaws at the government’s expense when they work for a corporation that they also own and control. Specifically, prior to the Bush tax cut the corporation would have (correctly) paid these employee-shareholders a salary for their labor. However, the corporation is now more likely to substitute a dividend for that compensation, preventing any employment tax from coming into play and shortchanging the social security trust fund at a time when its long term solvency is in jeopardy. The article proposes a new and practical framework for addressing the defects in the law in order to produce more sensible and equitable results while eliminating opportunities for abuse.

[Zelinsky] argues that “[i]t is time to abolish the dormant Commence Clause prohibition on discriminatory taxation.” This is so, he writes, because “the prohibition is today doctrinally incoherent and politically unnecessary.” The incoherence, Zelinsky maintains, stems from the disparate treatment by the United States Supreme Court of economically identical activities: “discriminatory taxation favoring local industries,” which the doctrine prohibits, and “direct expenditures subsidizing those same industries,” which it permits. It is unnecessary, Zelinsky argues, because Congress is able, and better suited, to police any state abuses. In short, “[l]ike a once-great champion who refuses to leave the ring, the dormant Commerce Clause prohibition on discriminatory taxation stumbles along well past its prime.” [Denning] finds in Zelinsky’s proposal a slippery slope. As Denning argues, taking Zelinsky’s argument on its own terms, “there is no reason to restrict his proposal to tax cases.” And yet, writes Denning, “if the antidiscrimination principle is to be jettisoned in nontax cases as well, then we might as well do away with the [dormant Commerce Clause doctrine (DCCD)] altogether, since the antidiscrimination principle is the DCCD’s most robust branch.” Pretty quickly, writes Denning, it appears that “Professor Zelinsky is really proposing nothing less than the abandonment of the DCCD in toto.”

Mrs. Livingston, a senior archivist in the Office of Presidential Libraries at the National Archives for 30 years, supervised work on Nixon's early papers. In March 1970, while working with a manuscript dealer chosen by Nixon, she selected 1,176 boxes of personal papers that the president intended to donate to the nation. A change in federal tax law would have prevented Nixon from taking a deduction for the donation. But the dealer prepared an affidavit that said Nixon donated his vice presidential papers a year earlier than he actually did, which gave the president a $450,000 tax break. Public indignation at Nixon's nonpayment of federal taxes led to a hearing before the Joint Committee on Internal Revenue Taxation. Mrs. Livingston testified that the president could not have donated the papers in 1969 because the dealer asked her to select the papers a year later....

The dealer aroused her suspicions from the start, Mrs. Livingston told the committee, when he wanted her to keep their interaction from her supervisor. She promptly filed a memo to her boss. Three years later, when a newspaper story mentioned Nixon's tax deductions, she wrote another memo, suggesting that investigators seek out the original deed of donation. Her testimony before Congress resulted in a 1974 ruling that the deduction was improper. She was also an important witness in the 1975 fraud trial of the manuscript dealer, who was convicted. Mrs. Livingston received an award from the Society of American Archivists for her "conscientious performance of duty." ...

Law firms, continuing legal education providers, technology providers, and law schools all have a role to play in ensuring that attorneys are prepared for a technologically-mediated world. To meet this challenge, these organizations must understand what to teach and how to teach it. In many ways the opportunity demands an entrepreneurial approach: relentless experimentation to sharpen both practice and the pedagogy of practice. It also requires institutional awareness: understanding not just the divide between academy and practice and the divergent challenges facing global mega-firms versus local community lawyers, but also how to bridge those differences when necessary.

In the United States, approximately 80 percent of commuters drive to work alone. Why do United States commuters persist in driving alone when the evidence is clear that they are wasting time and money, exposing themselves to the risk of accidents, polluting their neighborhoods and damaging their health? Many commuters have no other practical choice. Years of government subsidizing a low density, petroleum intensive lifestyle have created this dilemma. Transportation choices are limited because of (1) the federal funding mechanism for transportation projects, (2) disparate treatment of employee fringe benefits for transit versus parking, (3) the home mortgage interest deduction which encourages low density housing, and (4) the preferential tax treatment of the oil and gas industry. Other federal tax provisions, such as expensing rules that encourage purchase of large sport utility vehicles and the deductibility of advertising expenses liberally used by the automotive industry, contribute to the problem. Changes to the federal tax system can help create a solution.

Congress created the Taxpayer Advocate Service (TAS) to assist taxpayers in resolving problems with the IRS and to propose changes to IRS's practices to mitigate problems affecting taxpayers in general. TAS uses case advocacy and systemic advocacy, respectively, to address these two goals. GAO was asked to address (1) why TAS's caseload has increased since 2004, (2) how well TAS conducted its case advocacy activities in terms of measures such as customer satisfaction and quality, and (3) how well TAS measures and reports its systemic advocacy efforts. GAO interviewed TAS and IRS managers and other staff, reviewed TAS and IRS documents, and analyzed TAS and IRS data.

This document, prepared by the staff of the Joint Committee on Taxation, provides a description and analysis of the revenue provisions modifying the Internal Revenue Code of 1986 (the “Code”) that are contained in the President’s fiscal year 2008 budget proposal, as submitted to the Congress on February 5, 2007. The document generally follows the order of the proposals as included in the Department of the Treasury’s explanation of the President’s budget proposal. For each provision, there is a description of present law and the proposal (including effective date), a reference to relevant prior budget proposals or recent legislative action, and an analysis of policy issues related to the proposal.

On page 301, the Joint Committee projects that the President's proposed standard deduction for health insurance, coupled with repeal of the exclusion for employer-paid health insurance, self-employed health insurance deduction, and itemized medical deductions, would result in a $333 billion tax increase over 10 years.